Abstract
Abstract: What caused the decline of beef jerky production in Brazil? The main sustenance for slaves, beef jerky was the most important industry in southern Brazil. Nevertheless, by 1850, producers were already worried that they could not compete with Uruguayan industry. Traditional interpretations attribute this decline to the differences in productivity between labor markets; indeed, Brazil utilized slave labor,whereas Uruguay had abolished slavery in 1842. Recent research also raises the possibility of a Brazilian "Dutch disease",which resulted from the coffee export boom. We test both hypotheses and argue that Brazilian production's decline was associated with structural changes in demand for low-quality meat. Trade protection policies created disincentives for Brazilian producers to increase productivity and diversify its cattle industry.
Highlights
The cattle industry was the most important economic sector in southern Brazil during the nineteenth century
Monasterio raised an alternative hypothesis, suggesting that the coffee export boom damaged the southern industry through a “Dutch disease”: the real exchange rate appreciation caused by the soaring coffee exports raised Brazilian charque prices, making them less competitive against foreign competition
This paper argues that production costs, represented by the price of slave labor, were not responsible for the beef jerky industry’s decline
Summary
The cattle industry was the most important economic sector in southern Brazil during the nineteenth century. Traditional interpretations attributed the lack of competitiveness to labor markets These analyses credited as explanations for the stagnation in production differences in productivity between slave labor in Rio Grande do Sul and wage labor in Uruguay, as well as rising slave prices after the end of the transatlantic slave trade in 1850. With tariff protection offered by the government and a guaranteed market for its product, the southern Brazilian beef jerky industry did not have incentives to exchange their modes of production for more high-quality meats, since it would face international competition. Low wages in Brazil would make high-quality meat production unprofitable if producers relied solely on internal markets Another important aspect of the Brazilian and Uruguayan cattle industries’ different approaches involved the supply of new technology. Southern Brazil, in the absence of foreign investments, lacked access to financial institutions that could make such modernization possible
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